The landscape for company cars in Belgium is set to change significantly with the introduction of new fiscal rules from 2025. These changes aim to promote sustainable mobility and discourage the use of vehicles with high CO2 emissions. Here are the three main fiscal changes that companies and their employees need to be aware of:
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Abolition of Fiscal Deductibility for Combustion Engines
From 2025, the fiscal deductibility for vehicles with combustion engines, purchased between July 1, 2023, and December 31, 2025, will progressively decrease. This means that companies will enjoy fewer tax benefits for purchasing or leasing diesel or gasoline cars. The deduction percentage will decrease progressively until it reaches zero in 2028. The goal is to accelerate the transition to carbon-neutral vehicles.
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Increased Solidarity Contribution
The solidarity contribution, which companies must pay for each company car used for private purposes, will significantly increase. From July 1, 2023, this contribution will be multiplied by a certain factor, which will increase annually. This measure is designed to reduce the tax advantage of owning a company car, especially for non-carbon-neutral vehicles. The minimum contribution will be increased in 2025, directly impacting the total cost of a company car.
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Limited Deductibility for Hybrid Vehicles
For hybrid vehicles purchased after July 1, 2023, the fiscal deductibility of fuel costs will be limited to 50%. This strategy is intended to encourage the use of the electric motor over the combustion engine. Employees using hybrid cars are thus encouraged to drive electrically more often rather than relying on traditional fuels.
Impact and Preparation
These fiscal changes have not only financial implications for companies but also for fleet managers and employees themselves. Companies need to reconsider their fleet strategies, with a strong focus on integrating more carbon-neutral vehicles like fully electric cars, which, although more expensive initially, become more attractive due to changing fiscal benefits.
Employees should prepare for potentially higher taxes on their company cars, especially if they choose vehicles with combustion engines. It would be wise to consider whether switching to an electric or hybrid car might be more beneficial in the long run, given the new fiscal climate.
Conclusion
The fiscal changes coming into effect in 2025 mark a clear shift towards more sustainable transport solutions within the corporate world. Companies and employees adapting early to these new rules can not only benefit from tax advantages but also contribute to a greener future. It is crucial to act now and plan the transition to a more sustainable fleet.
